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Management at Gordon Electronics is considering adopting a bonus system to increase
Chapter 0, Problem 53(choose chapter or problem)
Management at Gordon Electronics is considering adopting a bonus system to increase production. One suggestion is to pay a bonus on the highest 5 percent of production based on past experience. Past records indicate weekly production follows the normal distribution. The mean of this distribution is 4,000 units per week and the standard Lin01803_ch07_222-264.qxd 10/23/10 12:34 PM Page 253 254 Chapter 7 deviation is 60 units per week. If the bonus is paid on the upper 5 percent of production, the bonus will be paid on how many units or more?
Questions & Answers
QUESTION:
Management at Gordon Electronics is considering adopting a bonus system to increase production. One suggestion is to pay a bonus on the highest 5 percent of production based on past experience. Past records indicate weekly production follows the normal distribution. The mean of this distribution is 4,000 units per week and the standard Lin01803_ch07_222-264.qxd 10/23/10 12:34 PM Page 253 254 Chapter 7 deviation is 60 units per week. If the bonus is paid on the upper 5 percent of production, the bonus will be paid on how many units or more?
ANSWER:Step 1 of 2
Mean of the weekly production is units and the standard deviation is units.
Let be the production per week.
Now,